EVENTS TO WATCH
- HMB - Earnings Call: Thursday 3/27, 9:00am
- LULU - Earnings Call: Thursday 3/27, 9:00am
- RH - Earnings Call: Thursday 3/27, 5:00pm
- FINL - Earnings Call: Friday 3/28, 8:30am
PVH - 4Q13 Earnings
Takeaway: Slight miss on the top line and a heavily adjusted beat on the bottom line = not a bad quarter for PVH. 1Q revenue guidance was in line with the streets expectations with the earnings number considerably below. $0.10 of that was due to a higher projected tax rate in 1Q14 vs. 1Q13. Inventories are unquestionably too high growing 46% on top of a 25% sales gain. For the record, no retailer should have a 19-page press release. The special charge reconciliation was painful.
KSS - Kohl's Chief Merchant to Exit
- "Donald Brennan, chief merchandising officer of Kohl’s Corp., will leave the company on April 1. Brennan, who has been with the...store since 2001, has been Kohl’s chief merchant since 2007 and earlier served as general merchandise manager of men’s and children’s and executive vice president of merchandising planning and allocation."
Takeaway: Resignation looks a lot more like termination when you consider the compensation package Brennan left with. It's clear that KSS is going in a different direction with a bigger emphasis on national brands. This move definitely supports that -- at least from where we sit. As an aside, we have never seen a chief merchant exit during a time of product success at a retailer.
LULU - 10 Things to Know About Lululemon's Warehouse Sale
- "As previously reported, Lululemon has selected Minneapolis, Minnesota as the next city to host its warehouse sale. It's a straight shot from the Mall of America and is going down this weekend, March 28 through March 30."
- "There is a 25 total item limit per guest (per visit). Athleticwear hoarders and eBay resellers be warned."
Takeaway: We've talked about the need for LULU to develop a discounting strategy as it grows to over $3bil in revenue by 2018. For now this is a good strategy as it allows the brand to liquidate inventory reserves and keep its full price floor set clean of discounted merchandise. But this approach -- or something like it -- will need to be scaled tremendously if the brand wants to grow up.
WWW - Buzz: Gandys, Keds & FitFlop
- "For spring ’14, French retailer Comptoir des Cotonniers is unveiling a special collaboration with Keds in-store and on its e-commerce site. The classic cotton canvas plimsoll will be offered in two colorways: sand and flag-blue feathered print with coordinating laces. A limited-edition version of the blue print also will be included, featuring black laces and sole. The sneakers will retail for $100 starting in mid-April."
Takeaway: Keds is building on its partnership with Kate, Taylor Swift, and Hollister. More importantly, this partnership is with a retailer outside the US. Prior to the WWW acquisition Keds was a $80mm brand (after shrinking from $500mm in the 1990s) with virtually no sales outside the US. Now the brand has WWW's logistics network behind it and some key partnerships with international brands that will help it gain exposure.
SHLD - Sears to Launch Seventeen Line
- "The Hearst publication...is partnering with Sears to create a full line of clothing, shoes and accessories. The collection will be sold in 500-square-foot Seventeen-branded shops-in-shop in Sears’ 10 flagships and 500 additional Sears doors. The shops will feature Seventeen signage, interactive elements, charging stations and image pieces."
APP - American Apparel to Sell Stock to Head Off Cash Crunch
- "American Apparel Inc., facing another cash crunch, plans to sell $30.5 million of stock to pour more money into its attempted turnaround and meet looming debt payments."
- "The funds will cover interest due next month on its senior secured notes...The underwriters also have a 30-day option to buy as much as $4.58 million in additional shares. The company’s market value was $83.4 million at yesterday’s close."